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ÁKK cuts three-month T-bill sale as demand falls

Demand fell sharply and the Government Debt Management Agency (ÁKK) sold HUF 27 billion three-month discount T-bills instead of the announced HUF 40 billion at the weekly auction of the bills on Tuesday. Yields rose from a week earlier.

Oversubscription was the lowest since the end of last November as market attention focused on a vote by the US senate to raise the country's debt ceiling.

The ÁKK sold HUF 27 billion of the bills expiring on November 9, cutting the announced amount from HUF 40 billion, after oversubscription fell dramatically, with bids for only HUF 46.7 billion.

At the previous auction on July 26 bids for the HUF 40 billion offer totaled HUF 125.8 billion.

The debt manager reduced its regular auction offer of the bills by HUF 10 billion from HUF 50 billion it had offered at the previous auction.

Average yield was 5.72%, 5 basis points over the yield at the previous auction of the bills a week earlier. The yield was 8bp lower than the secondary market benchmark yield calculated on a bill series which matures one week later than the bill offered.

Yields varied in an unusually wide range between 5.64% and 5.84% at the previous auction. All accepted yields were 5.67% at the previous auction.